Cape Town - Uncertainties around whether government funding of free higher education is sustainable have arisen in the wake of Minister of Finance Malusi Gigaba’s allocation of R57billion for the policy.
With no clear indication that a full costing proposal has been established, the next three years will form a road map that will determine how government approaches future funding models.
Currently the policy will accommodate first-year students whose parents earn not more than R350000 a year. Returning students who are dependent on the National Student Financial Aid Scheme’s (NSFAS) loans will from this year have them converted into a bursary.
In his Budget speech Gigaba said the plan will be rolled out in the coming years to accommodate all students.
Economist Dawie Roodt said until government takes serious strides in shrinking expenditure and cutting debt, sustaining the policy will be challenging. This as government spending increased from R1.67trillion to R1.94trillion.
“If we want to spend on universities, then we have to cut from somewhere else."
“Currently total state spending is too much. The state must get smaller and spend less because the state’s debt levels are just rising and rising and it is already becoming unsustainable."
“So the question should not be whether funding higher education is affordable, because it is affordable, but we must cut somewhere else.”
Speaking to UCT students earlier this week, Minister for Higher Education Hlengiwe Mkhize acknowledged that there were questions around the implementation of the policy. She wanted to first praise students who fought to get to this moment.
“We will be failing to acknowledge your gains if we don’t thank you for being part of the #FeesMustFall movement. Many of you sacrificed attending classes, confronted the police, some went through extremes, but at least the announcement acknowledged what you said."
“Of course there are legitimate questions around this budget in the sense that people were saying, given our economic outlook, is it really affordable? And the minister addressed an aspect of that in his speech and it is a standard practice all over the world, whatever challenges exist you looks at all the possibilities, you look at VAT."
“There are technical teams that will look at how this shapes out over the next three years, even the money that was already allocated last year, so that we are accurate in terms what this will look like over the next three years."
“Graduate tax is another thing that we might look at. I always count whenever people are graduating, thinking if we can charge each and every graduate tax of some kind that would be a huge contribution.”
Roodt said the thinking around graduate tax as a means of sustaining the policy was a bad idea.
“Whenever politicians want to introduce or talk about a new tax they will say this tax is meant for whatever, then you must know they are lying because whenever a new tax is introduced, initially it will be used for something specific but gradually over time this tax will form part of the bigger pot and will be used for something else, so it is not a good idea to a introduce a specific tax for a specific thing because eventually it will be mixed up with the other things,” he added.
“The money to fund this whole thing is supposed to come from other taxes, money that will be saved from elsewhere. The assumption is that the economy is going to grow to provide enough taxes, which I’m not so sure is going to happen, so we’ll wait and see.”